Saudi Arabia lines up banks for $15bn bond sale

Saudi Arabia plans to engage with bankers in Riyadh next week as part of its plan to launch its debut international bond of about $15bn as early as July 2016.

The Kingdom’s ministry of finance and a newly-formed debt management office would meet lenders on 6 – 7 June to hear proposals on how to organise the cash-strapped government’s first dollar-denominated bond.

Banks expected to take part include the Bank of Tokyo-Mitsubishi, HSBC and JPMorgan Chase, which were lead lenders on the kingdom’s $10bn loan in April 2016. Others thought likely to take part in the talks include BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs and Morgan Stanley.

Bankers involved state that the current issuance could comprise of 30-year bonds and the Kingdom could follow it up with further issuances later in 2016 and, potentially, one in 2017.

Source: FT


Hercules Offshore reports net loss of $26.9m for 1Q’16

Offshore-drilling vessel-provider Hercules Offshore reported a net loss of $26.9m, or $1.35 per diluted share for the 1Q’16 period, vs. net loss of $57.1m a year ago.

Revenues declined to $50.9m for the same period vs. $122.6m a year ago.

Company CEO John T. Rynd attributed the loss to continued weakness in the offshore drilling markets as oil prices declined, making its customers reduce their drilling activities.

The company had filed for bankruptcy in August 2015 and had emerged from it in November 2016.

Separately, the company had entered into a forbearance agreement with lenders last month and continues to explore options such as a potential recapitalization, business combination or other alternative strategic transactions, including the potential sale of its vessel Hercules Highlander, and a restructuring of its term loan.

Post-bankruptcy, the company had raised a $450m term loan to utilize $200m of it to pay its remaining installment on the Hercules Highlander vessel. The forbearance agreement has led to the company to explore selling its yet-to-acquired vessel.

Source: PR Newswire

P.S. Kindly refer to the one-page credit report on Hercules Offshore highlighting the company’s progress through bankruptcy.

Iberdrola closes €1bn green bond issuance

Spanish utility company Iberdrola S.A. closed an issuance of €1bn in green bonds priced at 99.943% of their nominal value. Proceeds would be utilized to refinance its onshore wind park assets in Spain, Portugal and the UK.

Green bonds are issued to fund projects that have positive environmental and/or climate benefits.

The notes pay an annual coupon rate of 1.125% and mature on 21 April 2026.

Lenders to the notes are as follows:

  • Banca IMI SPA
  • Banco de Sabadell SA
  • BNP Paribas
  • Caixabank SA
  • Citigroup Global Markets Ltd
  • HSBC Bank Plc
  • Merrill Lynch International
  • Mizuho International Plc
  • The Royal Bank of Scotland Plc

Source: SeeNews


Warren Resources continues debt restructuring talks with lenders

U.S-based oil E&P firm Warren Resources, Inc. is engaged in discussions with its first lien and second lien lenders and an ad hoc group of unsecured noteholders, regarding a restructuring of its debt obligations. These discussions would continue either through an out-of-court restructuring settlement or through a bankruptcy court proceeding.

First lien lenders under Warren’s credit facility had made a restructuring proposal that would help the company deleverage by converting a substantial amount of its debt into equity.

Warren had presented this proposal to its second lien lenders and to the holders of more than 95% of its unsecured bonds.

However, a consensus agreement among all three categories of creditors has not been reached. Failure to reach an agreement may force the company to file for bankruptcy.

As of 31 March 2016, Warren’s first lien creditors held debt of approximately $235m, second lien creditors held debt of approximately $52m and unsecured bondholders held approximately $167m of its senior unsecured notes. During the same period, cash position was $16.85m, of which $10.04m was in a restricted account under the control of the lenders under its first lien credit facility.

Warren elected not to make an interest payment of approximately $7.5m interest payment on 1 February 2016 on its unsecured notes.

With the expiry of the applicable 30-day grace period for the interest payment, as per the indenture governing the notes, the trustee and bondholders holding atleast 25% of the unsecured notes have the right demand payment of the entire principal amount of the notes plus unpaid interest.

In addition, this creates a cross-default on other debt instruments of Warren as well. However, no such acceleration on Warren’s debt obligations has occurred so far.

Warren’s advisors on its debt restructuring are Andrews Kurth LLP (as restructuring counsel) and Jefferies LLC (as financial advisor).

Source:  StreetInsider

JSPL averts loan default on agreement with lenders: Sources

India-based steel and energy company Jindal Steel and Power Ltd. (JSPL) avoided a default on its debt as it reached an agreement with lenders to refinance part of its debt under India’s 5/25 restructuring norms. The 5/25 scheme in India allows banks to extend long-term loans of 20-25 years to match the cash flow of projects, while refinancing them every five or seven years.

According to sources, lenders have agreed to restructure INR 2,500m (USD 377.3m) of its INR 450,000m (USD 6.7bn) debt, without disclosing further details.

Amongst others, lenders to JSPL are as follows:

  • Axis Bank
  • Bank of Maharashtra
  • EXIM Bank
  • HDFC Bank
  • Andhra Bank
  • Corporation Bank
  • Punjab and Sindh Bank

Sources: Moneycontrol

Goodrich Petroleum reaches bankruptcy agreement with lenders

US-based E&P company Goodrich Petroleum Corp. reached an agreement with lenders based on a prepackaged plan to file for Chapter 11 bankruptcy protection by 15 April 2016..

The prepackaged plan, which aimed to secure support from all lenders prior to filing for Chapter 11 bankruptcy, fell short of desired participation levels. As on 31 March 2016, the company received support from its unsecured lenders totaling 61% of the 95% needed to implement its debt-for-equity exchange offer.

The new plan of re-organization aims to give its second-lien lenders an equity stake in the re-organized company through its ongoing debt-for-equity exchange offer. The company has extended its offer to 8 April 2016.

Separately, Goodrich announced earlier in March 2016, that it would delay the filing of its annual report for 2015 citing a material loss that auditors had detected which would affect the company’s ability to operate as a going concern.

Source: Bloomberg